Every year, some teams retain cap space during the season and one of the potential purposes is to extract assets from another team who is looking to shed salary. This time around is different because a series of different factors (the 2016 spending bonanza, rising cap and new CBA among them) produced a situation where more franchises are in the area between the salary cap and luxury tax while fewer can be leveraged due to their proximity to the tax line.
Historically, the best bet for in-season trades has been franchises that are narrowly over the luxury tax line because moving under creates three benefits: eliminating their tax payment, lowering their salary obligation and allowing them to take a part of the distribution from the remaining luxury taxpayers.
The only team clearly in that situation this season are the Portland Trail Blazers, who are about $3 million over after sending Allen Crabbe to Brooklyn for Andrew Nicholson, then immediately stretching Nicholson. However, the Blazers are a little different than most of teams in their situation because they have billionaire Paul Allen as owner and are on the playoff borderline in the Western Conference without a big enough expiring contract for a non-contributor. Noah Vonleh is the most reasonable option and he makes sense going somewhere with limited cap flexibility in 2018 because those teams can benefit from restricted free agency narrowing his market without being burdened by a big cap hold. That said, Vonleh could just take his $4 million qualifying offer for 2018-19 so teams may just consider him a rental. Outside of Vonleh, it gets hard to figure out a reasonable fit for a straight salary dump without making a much larger deal.
Another team potentially in this camp would be the Washington Wizards since they are only $5.7 million over the tax line but they have lofty expectations and no clear fits as Jason Smith has a $5.5 million player option for next season that requires a more significant asset and their more expensive players are either too valuable or too immovable to make sense in this kind of deal.
The second variety of space-clearing trades around the deadline focus on reducing a team’s tax bill instead of eliminating it entirely. This season, the Warriors ($16 million over), Cavs ($14.8 million over) and Thunder ($13.3 million over) fit that description but each sees themselves as a serious contender and all three have high-profile free agents who would not appreciate a pure cost-saving move. Oklahoma City would love to unload Kyle Singler’s remaining season and a half, which would save them an astonishing $10.65 million in luxury tax payment alone this season, but that will require a significant sacrifice since any trade partner would be adding salary for this season and next. Golden State (JaVale McGee and/or Kevon Looney) and Cleveland (Iman Shumpert and/or Derrick Rose) have players they could offload but each brings challenges unless the right trade partner comes calling. In all likelihood, all three teams will look to make moves on the margin at a small asset cost if possible, especially since they could be players on the buyout market in late February and early March.
The 17-18 season actually has a larger group in a third camp: teams that are under the tax line but could use a little more breathing room, especially those who are hard-capped. The Pelicans (~$800,000) and Clippers (~$123,000) are each less than $1 million under the tax while the Raptors ($1.8 million) and Hornets ($1.9 million) have a little more wiggle room. The challenge for these teams and their trade partners is that most of the desired moves would be smaller and thus necessitate a more moderate payoff, which can work in certain circumstances but will likely be fallback trades for the remaining teams with cap space.
During the offseason, there is another high-leverage group: teams with cap space looking to clear additional room, presumably for a superior but a more expensive player. However, that largely evaporates by this point as there are no elite talents on the open market and players under contract are available by trade. Furthermore, teams like the Celtics and 76ers still have exceptions available, which increase their spending power without increasing their need to unload salary since both are well below the tax line.
There are two other challenges for the teams looking to wield remaining cap space this season. First, most of the above teams do not have particularly strong assets to include in trades. Portland has their own first round picks but only one second in the next two years, Cleveland can only trade one first and one second (Miami’s 2020) in the near term and Oklahoma City cannot trade a first until 2022 at the earliest. Also, each of those teams should be looking to keep their young talent under contract (Cedi Osman, Terrance Ferguson, etc) to help keep costs down in future seasons. Leveraging a trade partner requires a return and it will be hard to secure one.
Similarly, a large portion of the potential fits are either too good of players or too onerous of contracts to work as simple salary dumps. Portland is a great example as Ed Davis contributes every game without a clear replacement ready to step up on a potential playoff team while they owe Meyers Leonard almost $22 million after this season, making the aforementioned Vonleh the only truly viable option.
These factors will not kill this season’s deadline since there are a series of talented players on foundering teams that could and should be on the market but they significantly affect the value of retaining cap space this deep into the season. Teams like Chicago and Dallas will certainly have opportunities to make a splash but will have to make a decision about whether they want to take on multi-year contracts and what their asking price would be for that kind of deal since that also takes away flexibility and leverage in the summer of 2018.
The dynamic of teams frantically trying to offload salary for various purposes will likely return for both the summer of 2018 and the 18-19 season more broadly but the lack of urgency will have a major effect in January and February this time around.